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The Government has issued a new Presidential Regulation revising the negative investment list that sets out the limit on the share percentage that can be owned by foreign shareholders. Consistent with the previous regulation, all current investment structures that have been approved will be similarly grandfathered in against increased restrictions.

The Government has issued Presidential Regulation No. 39 of 2014 (PR 39/2014), which sets out the new negative investment list containing the business sectors that are closed or are partially open to foreign and domestic investment. The new negative investment list will replace the previous list under PR 36/2010, with a view of integrating Indonesia's economy to ASEAN, as well as accelerating development in the regions.

Article 35 of Law No. 2 of 2008, as amended by No. 2 of 2011, on Political Parties ("Political Party Law") provides for contributions to political parties, Articles 94 to 96 of Law No. 42 of 2008 on Presidential and Vice Presidential Elections ("Presidential Elections Law") provides for contributions to political campaigns, and Law No. 8 of 2012 on the Election of the House of Representatives, the Regional Representative Council and Regional House of Representatives (the "Legislative Elections Law") provides for contributions to House of Representatives campaigns.

PT Bursa Efek Indonesia has issued Decision of the Board of Directors of the Indonesia Stock Exchange No. Kep-00001/BEI/01-2014 on an amendment of Rule I-A ("Rule"), on 20 January 2014, coming into force on 30 January 2014, except as discussed below. The Rule sets out the IPO and subsequent share offerings requirements and procedures and listing fees. Notably the revised Rule sets out a free float policy and limits independent directors and commissioners to 2 successive terms.

BKPM Regulation No. 5 of 2013 has been revised to remove the provision that deemed listed companies controlled by foreigners to be subject to Indonesia's direct investment regime, returning to the previous arrangement where listed companies operate under the separate capital market framework and are treated as domestic companies for the purposed of foreign direct investment restrictions.

Head of the Indonesian Investment Coordinating Board ("BKPM") Regulation No. 12 of 2013 ("BKPM 12/2013") on the Amendment of Regulation No. 5 of 2013 ("BKPM 5/2013") on the Guide and Procedure of Investment Licenses and Non-Licenses has been issued on 11 September 2013, and came into force on 18 September, just over 5 months after BKPM 5/2013, issued on 8 April 2013, which is revises in order to tone down some of the more onerous provisions of the investment licensing regime. Most notably it retreats from the earlier infringement on the Capital Market regulatory regime by removing Article 49, which classified listed companies controlled by foreign shareholders as foreign direct investment companies (PMA), with the resulting application of a range of investment and operating restrictions.

Minister of Trade Regulation No. 22/M-DAG/PER/5/2013 on Import and Export Provisions for Animals and Animal Products ("Regulation") came into force on 28 May 2013 and will serve as the principal regulation on the export and import of animals and their products.

Indonesia remains on track to hit 6% growth this year, second only to China in the Asia Pacific region. Expanding consumer class and domestic consumption remain the backbone of growth while foreign investment continues to pour in. The Investment Coordinating Board (BKPM) reported foreign investment has grown by 22.9% for 2012's last quarter and expects a 23.3% growth in 2013.

Minister of Trade Regulation No. 22/M-DAG/PER/5/2013 on Import and Export Provisions for Animals and Animal Products ("Regulation") came into force on 28 May 2013 and will serve as the principal regulation on the export and import of animals and their products.

The Government recently submitted a draft bill on industry ("Bill") to the DPR. The Bill was introduced to replace the 1984 Industry Law (Law No. 5 of 1984), which is considered outdated, as it does not accommodate trends and advances in the industrial sector. The Bill is currently being debated by the DPR, which will have to vote on rejecting, accepting or amending it. This newsletter will highlight the important changes under the Bill as well as legislators' current attitude towards it.

Indonesia's Investment Coordination Board ("BKPM") issued Regulation No. 5 of 2013 on the Guide and Procedure of Investment Licenses and Non-Licenses ("Regulation 5/2013"). The regulation replaces its predecessor Regulation No. 12 of 2009 ("Regulation 12/2009") and serves as the principal regulation that governs the procedure on investing in Indonesia and obtaining tax and other facilities. Regulation 5/2013 comes into force 30 working days after 12 April 2013. This newsletter will highlight important changes under Regulation 5/2013.

The securities market where public offerings are conducted contributes an important role in the economic development of a country, including Indonesia, in terms of moving the financial resources from public to corporate sector which allows companies to undertake various projects in favor of the economy development as well as general corporate purposes. On the other hand it also enables the public ("Investors") to invest their assets (i.e. savings) in gainful investments which allow them to participate directly in the profits of the corporate sector.

President Yudhoyono has nominated finance minister Agus Martowardojo as the next Bank Indonesia governor when the incumbent Darmin Nasution's term expires in May this year. The nomination surprised pundits and experts alike. While his tenure at Bank Mandiri saw a substantial increase in profits from 2005 to 2010, Mr. Martowardojo's experience in monetary policy has been questioned - his nomination in 2008 was rejected precisely on this ground. The nomination needs to be approved by legislators at the House of Representatives (DPR), with many seeing this as a test of the executive's relationship with the legislatives. The test may serve as a prelude to two forthcoming key legislative issues: the passing of the state budget and the enactment of the new banking and oil & gas laws.

A new, 34th, North Kalimantan province, with Tanjung Selor as its capital, has been separated from East Kalimantan. Notably, the creation of new regions has previously resulted in mining disputes, such as between the state-owned Antam and the Regent of North Konawe in Sulawesi.

As 2012 draws to a close we look back on a year of steady business growth and at an unfortunate start to a period of increasingly haphazard populist legislation that can be expected to prevail until the 2014 Presidential Election (currently scheduled for 9 July 2014, following the 9 April 2014 House of Representatives election).

Bank Indonesia (BI) Regulation No. 14/17/PBI/2012 on Trusts (“Regulation”) was issued on 23 November 2012 to provides for limited trust activities, which only banks may offer and only legal entities may take advantage of.

On 18 October 2012 the House of Representatives passed the Bill on Food (“Bill”). The Bill intends to ensure food availability, affordability, and the ability to fulfil the demand for safe, high quality, and nutritious food on a national scale and local levels by utilizing resources, institutions, and local culture. The Bill is intended to better reflect to the external and internal development of food i.e. democratization, decentralization, globalization, law enforcement, and the actual condition of Indonesian society that is no longer can be accomodated with the predecessor regulation Law No. 7 of 1996.

Minister of Trade Regulation No. 59/M-DAG/PER/9/2012 ("MoTR 59/2012") has been issued to amend No. 27/M-DAG/PER/5/2012 ("MoTR 27/2012") on Importer Identification Numbers. The amendment has immediate effect, as of 21 September 2012, and revises the implementation of certain aspects of General Importer Identification Number ("API-U") and Producer Importer Identification Number ("API-P"). In accordance with Articles 4(1) and 5(1) API-U is given to importers for trade purposes, whereas API-P is given to importers for production purposes.

Bank Indonesia has continued to maintain the interest rate at 5.75%, all the while the Indonesian economy has continued its strong growth. This has resulted in increased attention to Indonesia's uniquely positioned economy and substantial growth potential, one such example being the recently well-circulated McKinsey Report.

Ministry of Trade Regulation No. 53/M-DAG/PER/8/2012 on Organizing Franchise Business has been issued to revoke the previous franchise regulation (Minister of Trade Regulation No. 31/M-DAG/PER/8/2008) and impose new requirements related to:

Indonesian development has continued apace so far this year, with Nielsen recently releasing research results that place Indonesia in the top position in its global consumer confidence survey. At the same time, however, inflation has also increased, and currently stands towards the upper end of Bank Indonesia’s target (4.56% year-on-year for July) while the Indonesian Rupiah has declined. This is likely to prevent any further reductions in the already historically low interest rate of 5.75%, and may indeed serve as a catalyst for rate increases in the medium term future.

Minister of Trade Regulation No. 39/M-DAG/PER/10/2010 on Import of Finished Goods by Manufacturers (“MoTR No. 39/2010”) has been revoked by the issuance of Minister of Trade Regulation No. 24/M-DAG/PER/4/2012 on 30 April 2012.

The Government of Indonesia (GoI) consistently took action in the implementation of IPR protection. The GoI has stated that Gorontalo (the 32nd Province of Indonesia that located in North Sulawesi) becomes the Free Zone of IPR violations, as well as operations against counterfeit products in the said region.

A significant macroeconomic development in recent months has been that Indonesia has regained an investment grade rating, from Fitch and Moody’s, for the first time since the Asian financial crisis over a decade ago. Combined with a record low rate of 5.75% that has been set by Bank Indonesia in February this should serve to encourage further investor confidence.

Government Regulation No. 47 of 2012 on Corporate Social and Environmental Responsibility ("Regulation) has been issued on 4 April 2012 to implement Article 70 (4) of Law No. 40 of 2007 on Limited Liability Companies. This is a long-awaited piece of implementing legislation that clarifies the nature of the required corporate social responsibility (CSR) activities, which have been a vague requirement (which has survived a Constitutional Court challenge) for nearly 5 years.

Indonesia is in a state of shock following the beheading of Ruyati binti Satubi in Saudi Arabia, on Saturday 18 June. Ordinary Indonesian citizens are appalled at the barbarous treatment of one of Indonesia’s overseas workers and fellow citizens.

Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) Rule IX.E.2 on Material Transactions and Changes in Core Business has been amended by the Chairman of Bapepam-LK Decree No. KEP-614/BL/2011 ("Decree"). The amendment has been in force since 28 November 2011, and has repealed Chairman of Bapepam-LK Decree No. KEP-413/BL/2009 on the same subject matter. The amendment adds exemptions to the disclosure rules for debt, creates a disclosure obligation for changes in the business of certain subsidiaries, and sets a deadline for reporting the completion of the transaction.

In the contract law theory, under Indonesian law, an agreement is deemed to have occurred if there is consent of the parties. This is according to the Civil Code as the applicable contract law, i.e. Article 1320 of the Civil Code:

Head of Capital Investment Coordinating Board (BKPM) Circular Letter No. 2 of 2011 on the Regional Implementation of Investment Services (“Circular Letter”) has been issued to decentralize the authority over investment by shifting it from the central government to the regional governments. The Circular Letter was issued on 7 March 2011.

Bank Indonesia Circular Letter No. 13/8/DPNP, dated 28 March 2011, on Fit and Proper Tests (“Circular Letter”) has been issued to implement Bank Indonesia Regulation No. 12/23/PBI/2010 on Fit and Proper Tests (“Regulation”). The Circular Letter has been in force since 28 March 2011 and repeals and replaces Bank Indonesia Circular Letter No. No.6/15/DPNP, dated 31 March 2004; and the Regulation, since 29 December 2010, repeals and replaces Bank Indonesia Regulation No. 5/25/PBI/2003, on the same subject matter, so as to improve good governance in the banking industry.

Government Regulation No. 55 of 2010 on the Guidance and Supervision of the Management of Mineral and Coal Mining Operations (‘Regulation') was issued on 5 July 2010. The purpose of the Regulation is to govern the supervision of the extractive industries, by implementing Article 144 of Law No. 4 of 2009 on Mineral and Coal Mining ("Mining Law").

Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) Regulation No. VI.C.4 (KEP-412/BL/2010) (‘Regulation') will come into force on 5 November 2010. The purpose of the Regulation is to implement Article 52 of Law No. 8 of 1995 on Capital Markets by regulating the relationship between the Issuer of debt securities (bonds) and the Trustee.

The Indonesian Trademark Appeal Commission in their decision number 79/KBM/HKI/2009 dated 08 May 2009, states that trademark “COBB” is having substantial similarity in its essential part with trademark “GOLDEN COB” under registration number 517524 to cover similar kind of goods which is class 31. Therefore, trademark “COBB” is rejected due to prior registration of trademark “GOLDEN COB”.

Indonesia’s franchise industry has been significantly developing in recent years. Dominated by small and medium companies, in 2009, Indonesian franchise’s yearly turnover reached US$ 9.5 billion and the number is still increasing to date. Recent research has expected yearly turnover to exceed US$ 10 billion by the end of 2010. The research also records domination of domestic franchise over foreign franchise distribution.

Mergers, consolidations and acquisitions are three means commonly used by businesses, among other things, to expand and increase their efficiency. They can also attract the attention of competition regulators, as these types of transactions can result in an increase of concentration in the relevant market, which may eventually result in the occurrence of monopolistic practices and/or unfair business competition, as defined by the relevant laws.

In a Limited Liability Company (”Company”), the Director is one of the Company’s organs who oversees the activities of the Company. In overseeing the activities of the company, the Director has the right and authority to act for and on behalf of the Company.

The State Minister of National Development Planning / Head of the National Development Planning Board has released a Guidelines for Compiling Departmental and Institutional Strategic Plans through Minister Regulation No. 5 of 2009. The Guideline covers the scope and procedure of Government Ministry/Institution Strategic Plan for the period of 2010-2014. All of the initial strategic plans are to be submitted by 15 October 2009.

In order to enhance protections for insurance customers, Minister of Finance will soon replace Ministerial Decisions on Investigations of Insurance Companies No. 423/KMK.06/2003 with a new Regulation. The draft regulation will provide additional definitions for loss insurance, life insurance, and insurance brokers. Direct investigations of an insurance company under this Draft should be done with a prior notification to the Insurance Company and Capital Market and Financial Institutions Supervisory Agency. An indirect investigation is to be carried out by the insurance bureau. In addition, both direct and indirect investigation should be conducted periodically.

On 23 June 2009, Presidential Regulation No. 27 of 2009 on Integrated One-Stop Services in the Capital Investment Sector (“PR 27”) was issued. PR 27 was enacted to implement Article 26(3) of Law No. 25 of 2007 Regarding Capital Investment (“Law 25”), which requires the issuance of a Presidential Regulation for further implementation of the “one gate policy in investment services”.

In a General Shareholder Meeting ("GMOS"), we often discover that a quorum is unattainable due to the absence of shareholders even though the shareholders have been officially summoned to attend the GMOS. The absence of shareholders may result from a disagreement over the agenda of the GMOS. In such event, the Board of Directors or the Board of Commissioners may issue the summons for the second GMOS. Furthermore, if the second GMOS quorum is still unattainable, according to Law No. 40 Year 2007 regarding Limited Liability Company ("UUPT"), the company may request that the Head of the District Court, who has jurisdiction over the company's domicile, determine the quorum for the third GMOS. The UUPT regulates this matter in order to avoid a deadlock in making decisions, which may hamper the company's business activities.

In a company, the Director or the Board of Directors plays a very important role in managing the company's daily activities, which could result in two possibilities, the growth or the loss of the company. In order to achieve such goals, the Director or the Board of Directors needs to have sufficient knowledge in order to manage and develop the Company because as a professional, the Director is granted valuable powers, by the law or by the Articles of Association of the Company.